The CARES Act precluded the agency from exercising one important check on fraud in the Economic Injury Disaster Loan program. EVERY primarily used Cash App to receive the initial payments. Compare the spread of the infection with other areas in the U.S. We will also begin processing paper returns downloaded from the LDR website at, The federal Coronavirus Aid, Relief and Economic Security (CARES) Act provided Economic Impact Payments of $1,200 for qualifying individuals and $2,400 for qualifying married couples, with an additional $500 per dependent child. Greenbergs insider was a loan officer who began working for the agency in May 2020. Small Business Administration management flagged loans for at least one of 35 reasons, such as the recipient was created after the cutoff date of February 15, 2020, or the recipients owner had a criminal record, potentially rendering the recipient ineligible. The PPP loan forgiveness is not subject to Louisiana state income tax. Babysitter arrested after 5-year-old fatally shot by 6-year-old cousin. All rights reserved. Unfortunately, the owners of Victoria Nails & Spa saw this program as their own personal piggy bank. In connection with loan applications for COVID-19 relief available from the Paycheck Protection Program (PPP) of the SBA, the defendants falsely and grossly overstated the number of employees and payroll at their nail salons and other businesses through fraudulent and doctored payroll and tax records in order to obtain larger loans. Click on a company's name to see additional loan details. The cases involve attempts to steal a total of more than $175 million from the program, with actual losses to the federal government totaling more than $70 million, the DOJ reports. In 111 instances, the zip code in the Small Business Administrations data did not match the state provided. The program worked like this. If the borrower can prove they used the money to pay employees and eligible expenses, they can ask the SBA for loan forgiveness. The auditor found that the deficiencies were caused by an inadequate entity wide control environment.. We are concerned only with actionable fraud. He added that, in selecting enforcement targets, we will follow the law, and we will not pursue companies that access CARES Act programs in good faith and in compliance with the rules.. (Eligible companies and nonprofit organizations can apply for and receive both Paycheck Protection Program and Economic Injury Disaster loans.). All rights reserved. An official website of the United States government. According to the Justice Department, Didier Kindambu obtained two loans by creating fraudulent payroll documentation for each business.. A check of Floridas Division of Corporations database would have revealed the companies had just been reinstated. The Small Business Administrations Office of Inspector General found a significant gap in the agencys data on underserved markets, such as ethnicity, veteran status, and women-owned businesses. Horowitz, the Justice Departments inspector general, recently testified to a House panel examining COVID-19 loan fraud that a legislative reform could help address the problem of fraud in smaller dollar amounts. ) or https:// means youve safely connected to the .gov website. As of this month, weve seized over $580 million from over 23,000 fraudulent EIDL loans.. 3 Defendants Arrested For Over $13 Million Fraud Scheme To Obtain Loans Intended To Help Small Businesses During COVID-19 Pandemic Three Family Members Arrested for Misrepresenting Employee Payroll Figures to Receive COVID-19 Loan Funds for Chain of Family-Owned Nail Salons in New York Metropolitan Area and Other Businesses Its up to the SBA and the Justice Department to go after anyone caught stealing PPP money. A borrower applied for a PPP loan from a lender or bank. Barbershops were one of the most common businesses to apply. This Office was one of the districts affected by the SolarWinds intrusion. An indictment includes text and email messages involving creating tax records for some of the companies. Using a telemarketing scheme called My Buddy Loans, the telemarketing scheme exploited those seeking assistance during the COVID pandemic, including many who were over the age of 55, according to a Small Business Administration inspector general agent quoted in a Justice Department press release. The cases involve attempts to steal a total of more than $175 million from the program, with actual losses to the federal government totaling more than $70 million, the DOJ reports. The involvement of a Small Business Administration employee in a pandemic loan fraud case raises questions about the agencys vetting of employees. Former La. What happens when the watchdog tasked with overseeing the most powerful law enforcement agency in the country doesnt do its job? On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Department of Justice (DOJ) says as of Aug. 8, more than 5.2 million forgivable loans have been approved, at a total of more than $525 billion. But in March 2021, the Small Business Administration Office of Inspector General issued a report that found that lenders last year issued more than one Paycheck Protection Program loan to 4,260 borrowers with the same tax identification number and borrowers with the same business name and address. Those loans were worth a total of $692 million. The oversight failures of the last year have become increasingly clear, eventually leading to changes. First Home Bank approved the $8.4 million loan, among the less than 0.1% of Paycheck Protection Program loans this large or larger (the maximum is $10 million). Data is available, but its reliability for the purpose of assessing whether Paycheck Protection Program loans are reaching the underserved communities that Congress wanted prioritized is limited because the demographic data is incomplete. Maybe, maybe not all.. Based on the data, between $5,589,989,154 and $10,528,439,154 have been loaned through the Payroll Protection Program to businesses in Louisiana. | The addresses listed for the two companies, according to SBA loan data, also do not match the addresses in the states corporation recordsyet another sign of potential fraud. An internal analysis last fall by the Small Business Administration identified over 2 million approved PPP loan guarantees worth some $189 billion that were potentially not in compliance with the law, though it may turn out that many of those loans were not fraudulent. The forgivable loans were meant to cover payroll for employees and, later, other eligible expenses at a time when customers werent coming in. NGUYEN, VICTORIA HO, and DAT HO are members of a family that owns a chain of over 15 nail salons called Victoria Nails & Spa and other companies (the Victoria Companies) in or around the New York metropolitan area, including the Bronx, Brooklyn, and Long Island. EVERY created all of the false and fraudulent invoices, bank statements, and Schedule Cs. The Department of Justice confirms they are looking into reports of PPP fraud across the nation. SOUTHERN MAGNOLIA LANDSCAPING LLC. In other words, lenders and the Small Business Administration did not prevent the alleged fraud in these instances before taxpayer dollars went out the door. Pursuant to the CARES Act, the amount of PPP funds a business is eligible to receive is determined by the number of employees employed by the business and their average payroll costs. Mr. Aqeel asserts his presumption of innocence and demands the United States prove their allegations beyond a reasonable doubt. Mingledorff also said, The case is in the pretrial phase of litigation. There are many potential cases the Justice Department may not prosecute. But in the year since the CARES Act became law, it has received nearly 150,000 hotline complaints, representing a 19,500% increase over prior years, according to a staff memo from the House Select Subcommittee on the Coronavirus Crisis. 650 Poydras Street, Suite 1600 mike vernon royal household; are there snakes in gran canaria; shooting in laurel, md yesterday. According to todays indictment, EVERY created a fictitious business called Natural Hair Afro, LLC, Houma, LA 70360 and used this fictitious business name on nearly all of the fraudulent PPP loan applications. In July, the agencys inspector general warned of potentially rampant fraud in the Economic Injury Disaster Loan program. The nonprofit MITRE Corporation found more than 85% of Paycheck Protection Program loan recipients did not indicate their race or ethnicity in their loan applications, Earlier this year, the Biden administration revamped the Paycheck Protection Program loan application to encourage self-reporting of demographic data and better illustrate the impact the PPP is having across various population segments. But the Small Business Administration acknowledged, as of late March, there is still limited demographic data on PPP borrowers.. If someone defaults, or cant pay it back, the SBA will still reimburse the lender. This interactive map provides a picture of the ranks of the unemployed at the national, state and county level. Grossman said his office has shared data with the Department of Health and Human Services Office of Inspector General, which identified some repeat offenders. They determined that a lot of the folks that they have as subjects of their investigations in HHS OIG [for Medicare and Medicaid fraud], were also committing PPP and EIDL fraud, Grossman said. Two of the companies, Symbiont Retailers and Horizon Enterprises, were not in good standing before the Paycheck Protection Program began. They allegedly exploited a program designed to provide vital funding for small businesses that are legitimately struggling in the midst of the pandemic. Nick Schwellenbach is a Senior Investigator at POGO. SOUTHERN CLASSIC OF FARMERVILLE LLC. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. are moving. If youre going to steal money, finite resources from people who need them, then, by God, were going to prosecute you.. Copyright 2020 WAFB. The Department of Justice, and in particular my office here in the Middle District of Louisiana, is committed to investigating and prosecuting those who abuse the system for personal gain and will use every resource at our disposal to protect those federal dollars and the businesses they are intended to help. On March 30, the Justice Department unveiled new charges against Joel Greenberg, a former Florida tax collector. I urge anyone who believes he or she is a victim of this type of fraud to report it to the National Center for Disaster Fraud," said US Attorney Brandon Fremin. Facebook; Linkedin; louisiana ppp loan arrestsaboriginal handmade jewellery 19 January 2023 / in types of poop poster spencer's / by / in types of poop poster spencer's / by The cash injection and potentially forgivable loans were . The SBA now also conducts manual loan reviews for the largest loans in the PPP portfolio and a random sampling of other loans. Underscoring the tension between fraud prevention and disbursing assistance quickly, the added checks to verify information submitted by applicants have somewhat slowed the processing of loan applications. For instance, in one larger case, the Justice Department has charged 19 individuals to date. DAVID RAINES COMMUNITY HEALTH CENTER, INC. Shes accused of making up fake businesses to collect more than $20,000 through a PPP loan and another $500,000 in prepaid debit cards through unemployment claims. POGO has sought additional data from the Small Business Administration, and to improve data collection. UNION VETERINARY CLINIC, INC. 65780. Thanks to the combined efforts of the SBA, the FBI, and IRS-CI, the defendants face prosecution., SBA-OIG Special Agent-in-Charge Amaleka McCall-Brathwaite said: Falsifying documents to fraudulently gain access to SBA program funds is unconscionable. The prosecution of this case is being handled by the Offices Complex Frauds and Cybercrime Unit. The SBA Employee would and did use her access to the SBAs computer systems and her access to EIDLs to manipulate the status of EIDLs to trigger the system to extend funding for EIDLs submitted for the benefit for Joel Micah Greenberg, the indictment alleges. They have never said they won't seek prison time for below a minimum dollar amount. An Archdale man was arrested after authorities say he falsely received more than $1.5 million in COVID-19 relief money through the Paycheck Protection Program. He also opened bank accounts and lines of credit at financial institutions and credit card companies in the names of his elderly victims, according to the Justice Department. However, not everyone taking part in the federal program was looking to keep their business doors open. Funds disseminated through this program are subject to Louisiana state income tax. EVERY prepared and submitted false and fraudulent PPP sole proprietor loan applications via various online portals including, but not limited, to Blueacorn. More due diligence on the part of lenders or the Small Business Administration could have prevented at least some instances of fraud. As former federal prosecutor Tarek Helou told the Wall Street Journal, The scandal is whats legal, not whats illegal., Lenders may also be more likely to face civil enforcement than criminal enforcement. For media inquiries, contact: SBA has fired employees and contractors who were involved in approving loans to themselves or who inappropriately influenced loan approval. Greenberg is a friend of Florida Republican Matt Gaetz, and both were identified in a recent New York Times report as having allegedly paid women for sex, as well as potentially a 17-year-old girl. Kindambu applied for two Paycheck Protection Program loans representing Papillon Holdings, Inc. and Papillon Air, Inc., according to court documents. Meant to help small businesses keep workers on the payroll, the Paycheck Protection Program offers loans of up to $10 million that can be forgiven in full if recipients meet certain employee retention requirements. Published 8:46 am Sunday, September 11, 2022 . According to court records, Amir Aqeel and several others in the Houston area allegedly created fake tax and payroll documentation in exchange for large kickbacks for referring others into the scheme that involved 12 corporate entities. $56,095 AVERAGE PPP LOAN. In connection with these loan applications, the defendants falsely and grossly overstated the number of employees at the Victoria Companies and wages paid to those employees in order to obtain larger loans. And these cases are just the beginning. But, he added, the CARES Act removed that control, calling it a pivotal change.. Some of these qui tam lawsuits are traditional whistleblower cases, but others involve individuals who are slicing and dicing the data that has been made available about loans, according to Grossman. The United States Attorneys Office would also like to acknowledge the assistance of the Veterans Administration, Office of the Inspector General; United States Department of Labor, Office of the Inspector General; United States Department of Homeland Security, Homeland Security Investigations; and the United States Secret Services Cyber Fraud Task Force, consisting of the Jefferson Parish Sheriffs Office, Lafourche Parish Sheriffs Office, Thibodeaux Police Department, and the Louisiana Bureau of Investigation with this matter. Complaints can also be filed online here. The Small Business Administration has sent 1.34 million referrals related to Economic Injury Disaster loans to its office of inspector general, which is tackling these and Paycheck Protection Program fraud cases in coordination with a host of other law enforcement agencies. In order to support the false representations in the loan applications about the number of employees at, and the wages paid by, the Victoria Companies, the defendants submitted fraudulent and doctored payroll and tax records. Louisiana has a total of 217,332 businesses that received Paycheck Protection Program (PPP) loans from the Small Business Administration. (The latest round, which began in January, allowed some applicants to receive a second Paycheck Protection Program loan. Gaetz has denied the allegations and Greenberg has pleaded not guilty, although Greenbergs attorney and a prosecutor have said in court that he may be striking a plea deal soon. More than half of that amount$246 millionactually went to accused fraudsters. 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